RE: Virgin Red-New US low cost airline
>Will never happen.
>
>The US simply will not tolerate foreign competition. Bush is
>too much of a “Smith & Wesson Socialist” to do that.
>
>Didn’t BA try something similar with USAir about a decade
>ago? I vaguely remember something about that.
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Wait a minute! You are barking up the wrong tree when you claim US protectionism will prevent low cost carriers from the UK getting established in the US. Do you see any low cost US carriers in Europe? I don’t think so.
The cost of getting all the infrastructure established,(maintenance, facilities, etc)would immediately put any foreign operation in the hole from a cost basis. Buying a hub and spoke carrier with a bleak financial picture like US Airways won’t help either given the typical point to point operation of a low cost carrier.
Southwest and Alaska Airways have been in a pitched low cost battle on the west coast of the US for years. Now they are moving to the eastern US. These airlines are masters and I mean masters at keeping costs down. Most new low cost carriers will be caught in a buzz saw trying to compete with them.
I may be wrong, but even Jet Blue’s cost structure looks too expensive. For instance Direct TV for free. It’s just another system to break down. And current entertainment systems do break down. When Jet Blue gets a little age on those systems and Jet Blue’s maintenance costs and airplane down times go up. I look for trouble at Jet Blue, especially if they cross paths with SWA in the future.
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